What a rollercoaster ride it has been for the Zip Co Ltd (ASX: ZIP) share price.

From reaching an all-time high of $14.53 in February 2021, the buy-now pay-later (BNPL) shares are now trading at 53 cents. That represents a massive 96% decline in just 16 short months.

And even when you look at year-to-date, its shares are down 90%. This means the share price would need to increase by 900% to break even.

While you may think Zip shares are too cheap at current valuations, here’s why I won’t be buying at all.

Investors fall out of love with the BNPL industry

The once gleaming BNPL industry was popular among investors as consumer trends shifted during the pandemic.

Government stimulus packages among record low interest rates drew an insatiable appetite for shoppers.

However, as quickly the BNPL market soared, it has now almost turned to dust.

To put that into perspective, Zip was once valued more than $6 billion at its height. More than retail giant, JB Hi-Fi Limited (ASX: JBH).

Today, the BNPL company has a market capitalisation of around $371.49 million. A staggering fall of 94%.

Why I won’t be a buyer of the Zip share price

With so many market entrants to the BNPL sector, it has become increasingly crowded.

Recently, tech behemoth Apple Inc. (NASDAQ: AAPL) also signalled its move into the BNPL space.

Titled “Apple Pay Later”, the service offering doesn’t charge any interest or late payment fees to customers.

In addition, a number of major Australian banks such as Commonwealth Bank of Australia (ASX: CBA) have promoted their own offering.

Furthermore, Zip is experiencing credit losses outside its target range. With the latest figures at around 2.6% of total transaction volume, this may increase due to the current macroenvironment.

Interest rate hikes due to soaring inflation levels are leading some economists to predict a recession in 2023.

Essentially, what this means is that consumers are less likely to spend on discretionary items when interest rates are high. The cost of debt such as credit cards, personal loans and mortgages will require extra payments, affecting consumer spending habits.

The post The Zip share price is down 90% in 2022. Why I won’t be buying appeared first on The Motley Fool Australia.

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More reading

• Zip share price falling again as market experts argue for UK and US exit
• Why A2 Milk, Bubs, Evolution, and Zip shares are rising despite the selloff
• The Zip share price is actually climbing today. What’s going on?
• Is the ‘path to profit impossible’ for Zip shares?
• ASX 200 midday update: Block and Zip crash amid market selloff

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended ZIPCOLTD FPO. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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If you’re aiming to boost your income with some dividend shares, then the two listed below could be worth considering.

Both have been named as buys and tipped to pay attractive dividends in the near term. Here’s what you need to know about these ASX 200 dividend shares:

Centuria Industrial Reit (ASX: CIP)

The first ASX 200 dividend share to look at is Centuria Industrial. It is the owner of a portfolio of high-quality industrial assets situated in key metropolitan locations throughout Australia.

Demand for the company’s properties has been very strong and has so far underpinned a portfolio occupancy rate of 99.2% and 10% rental growth in FY 2022.

The good news is that analysts are expecting this positive trend to continue thanks to elevated demand from the e-commerce sector, which is creating competition for high-quality industrial assets.

Analysts at Macquarie are positive on Centuria Industrial and have an outperform rating and $3.94 price target on its shares. Macquarie highlights that recent weakness has left the company’s shares trading at a large discount to net tangible assets.

As for dividends, the broker is forecasting a 17.3 cents per share distribution in FY 2022 and a 16.8 cents per share distribution in FY 2023. Based on the current Centuria Industrial share price of $2.89, this will mean yields of 6% and 5.8%, respectively

Macquarie Group Ltd (ASX: MQG)

Another ASX 200 dividend share that has been rated as a buy is investment bank Macquarie.

Macquarie recently released its full-year results for FY 2022 and revealed a 56% increase in net profit after tax of $4.7 billion. This was driven by growth across the business after a stellar 12 months.

Analysts at Morgans concede that it will be hard for Macquarie to top this in FY 2023. However, it feels investors should look beyond this and focus on the long term. As a result, it has put an add rating and $215.00 price target on the bank’s shares.

Morgans explained: “We anticipate some near-term earnings volatility over FY23 but we like MQG’s favourable longer-term growth profile and consistent history of delivering strong returns (~15% average ROE over time).”

In respect to dividends, its analysts are forecasting a $7.07 per share dividend in FY 2023 and then $7.47 per share dividend in FY 2024. Based on the current Macquarie share price of $164.00, this will mean yields of 4.3% and 4.5%, respectively.

The post Analysts name 2 top ASX 200 dividend shares to buy now appeared first on The Motley Fool Australia.

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• How does the Macquarie dividend stack up against the ASX big four banks?
• 2 powerhouse ASX shares going for dirt cheap right now: expert
• Top broker tips 30% upside for the Macquarie share price
• Why Macquarie shares could be set for a $570m tailwind
• ASX 200 bank shares tumble: Citi says time to buy

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Tabcorp Holdings Limited (ASX: TAH) share price was on form on Tuesday.

The gambling company’s shares ended the day up 1% at $1.06.

What drove the Tabcorp share price higher?

There were a couple of catalysts for the rise in the Tabcorp share price on Tuesday.

One was a rebounding ASX 200 index, which lifted most shares. The other was news that the announcement of wagering tax changes in New South Wales. Tabcorp believes the latter is “a further positive step toward industry reform.”

What’s happening?

From 1 July 2022, New South Wales will increase the Point of Consumption Tax (POCT) rate payable by wagering operators from 10% to 15%.

Tabcorp will receive transition payments over an 18-month period from the commencement of these changes to ensure it is no-worse off relative to its current tax obligations as a result of the changes.

Had these transition payments not been applied, based on Tabcorp’s calendar year 2021 NSW revenues, its EBITDA would have been approximately $16 million lower.

Tabcorp’s Managing Director and Chief Executive Officer, Adam Rytenskild, was pleased with the news but will push for further reforms.

Today is a positive step forward in levelling the playing field in NSW. Online bookies will pay a greater share of wagering tax which can be invested back into the local racing industry and ensures a fairer system.

We welcome the NSW Government’s announcement. Online betting has changed substantially since the TAB’s licences were issued and this is an opportunity to better align with the modern economy. The Queensland Government has recently announced reforms to create a level playing field and NSW is now a step closer to a level playing field.

How have Tabcorp’s shares been performing since the demerger?

Following today’s gain by the Tabcorp share price, it is now trading marginally higher than where it ended the day following the Lottery Corporation Ltd (ASX: TLC) demerger.

On 24 May, the company’s shares closed the session at $1.055 cents, just a touch lower than current levels.

Though, it is worth noting that Tabcorp’s shares continued to slide in the days that followed and closed at 90.5 cents on 1 June. So, anyone buying at that point would have done very well.

The post How has the Tabcorp share price been performing since the demerger? appeared first on The Motley Fool Australia.

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More reading

• These were the best performing ASX 200 shares last week
• Here are the 3 most traded ASX 200 shares on Tuesday
• Why GrainCorp, New Hope, Tabcorp, and Woodside shares are pushing higher
• Why is the Tabcorp share price racing higher today?
• ASX 200 midday update: Magellan smashed, Liontown signs Tesla deal

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The broker Morgan Stanley is now expecting a further drop of the Commonwealth Bank of Australia (ASX: CBA) share price.

With CBA shares already down 15% over the last month, Morgan Stanley’s new, lower price target now implies another step down.

For readers that aren’t sure what a price target is, it’s a guess of where brokers think a share price will – or perhaps should – be trading at in 12 months time.

Morgan Stanley’s new price target on the big four ASX bank is now $79. This is a reduction from the previous target of $91.

The reason for the banking pessimism

The lower price target implies a possible decline of more than 10% over the next year.

However, CBA wasn’t the only one to receive a cut. Morgan Stanley also cut the price targets of the other big four banks National Australia Bank Ltd (ASX: NAB), Australia and New Zealand Banking Group Ltd (ASX: ANZ), and Westpac Banking Corp (ASX: WBC) by more than 10%. The broker is more pessimistic on all of the big ASX bank shares.

Morgan Stanley analyst Richard Wiles commented (as reported by The Australian):

We believe that a quick and aggressive tightening cycle provides more support for margins, but will lead to a weaker housing and mortgage market and a higher probability of recession.

Our price targets have been lowered to reflect various factors, including attaching a higher probability to our bear case and reducing our bear case scenario values more sharply.

CBA share price valuation

The Commonwealth Bank is expected to grow profit in the shorter term.

CBA shares are valued at 17 times FY22’s estimated earnings. With a prediction of a small increase in profit, the CBA share price is then valued at 17 times FY23’s estimated earnings.

But there’s more to the major bank than just how much profit it makes. Investors may also like to know about the expected dividends from the bank over the next two financial years.

Dividend yield

Based on Morgan Stanley’s dividend estimates, at the current CBA share price, it could pay a grossed-up dividend yield of 6% in FY22.

The broker’s numbers then imply a double-digit rise in the annual dividend to shareholders in FY23.

Morgan Stanley has pencilled in a grossed-up dividend yield of 6.75% in FY23.

CBA share price snapshot

CBA shares have fallen by around 9% over the last 12 months.

The post Why did Morgan Stanley just slash its target for the CBA share price? appeared first on The Motley Fool Australia.

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More reading

• How does the Macquarie dividend stack up against the ASX big four banks?
• Why are ASX 200 bank shares having such a cracking start to the week?
• 3 ASX 200 bank shares slide to 52-week lows on Friday
• The CBA share price has lost 15% so far in June. Is it worth banking on?
• ASX 200 bank shares languish on Thursday despite market lift

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Macquarie Group Ltd (ASX: MQG) is a unique ASX share. It is often grouped together with the ASX 200 big four banks, and indeed is often called the ‘fifth big four bank’.

But with its funds management business, focus on investment banking, and relatively small market share in traditional banking products such as mortgages, Macquarie is arguably not really in the same boat as the big four.

But when it comes to ASX bank shares, investors often apply much of their focus to dividends. So let’s see how Macquarie stacks up against the other major ASX banks when it comes to shareholder income.

So, to reiterate, the big four banks like Commonwealth Bank of Australia (ASX: CBA) are well-known ASX dividend shares.

As it currently stands, the dividends on offer from the big four range from CBA’s current dividend yield of 4.21% to that of Australia and New Zealand Banking Group Ltd (ASX: ANZ) at 6.56%.

National Australia Bank Ltd (ASX: NAB) and Westpac Banking Corp (ASX: WBC) currently have yields of 5.21% and 6.16% respectively. All of these big four bank dividends come fully franked at present.

So, how does Macquarie measure up?

How does the Macquarie dividend compare?

Well, Macquarie’s latest two dividends consist of an interim dividend of $2.72 per share that was paid out last December, and a final dividend of $3.50 per share that investors will receive on 4 July.

The interim dividend came 40% franked. Next month’s final dividend will also be franked at 40%.

That’s an annual total of $6.22 in dividends per share. This gives Macquarie a dividend yield of 3.79% on the current share price.

So that’s definitely on the low end of what the big four currently have on the table.

But remember this before you sell your Macquarie shares to buy ANZ.

The Macquarie share price is up by 83% over the past five years. CBA shares are up 10% over the same period. NAB is down 8% and ANZ is also down 20.45%. Westpac has lost almost 35%.

That’s perhaps an argument why Macquarie shouldn’t be considered the ‘fifth big four bank’ right there.

The post How does the Macquarie dividend stack up against the ASX big four banks? appeared first on The Motley Fool Australia.

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• Why did Morgan Stanley just slash its target for the CBA share price?
• Why GrainCorp, PointsBet, Weebit Nano, and Westpac shares are racing higher
• Here are the 3 most heavily traded ASX 200 shares on Tuesday
• How to start investing in stocks: This ASX 200 share is where I’d begin
• The ANZ share price has tumbled 24% from its 2022 high. Is it time to pounce?

Motley Fool contributor Sebastian Bowen has positions in National Australia Bank Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Macquarie Group Limited and Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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In afternoon, the S&P/ASX 200 Index (ASX: XJO) is on course to record a strong gain. At the time of writing, the benchmark index is up 1.3% to 6,515.6 points.

Four ASX shares that are climbing more than most today are listed below. Here’s why they are racing higher:

GrainCorp Ltd (ASX: GNC)

The GrainCorp share price is up 4% to $9.47. Investors have been buying this grain exporter’s shares following the release of its investor day update. That update reveals that the company has reaffirmed its FY 2022 operating profit guidance of $590 million to $670 million.

PointsBet Holdings Ltd (ASX: PBH)

The PointsBet share price is up a further 10% to $2.80. This sports betting company’s shares have been on fire this week amid news of a strategic investment from SIG Sports Investment Corp (SIG). It has injected $94.16 million to become the company’s largest shareholder. Goldman Sachs sees positives from the investment, noting that it should alleviate balance sheet concerns. Its analysts have a buy rating and $5.78 price target on PointsBet’s shares.

Weebit Nano Ltd (ASX: WBT)

The Weebit share price is up 10% to $2.16. This morning the memory technology company revealed that it will be holding the first public demonstration of its ReRAM IP module later today in France. The interactive presentation will demonstrate its Weebit ReRAM functioning as a non-volatile memory block.

Westpac Banking Corp (ASX: WBC)

The Westpac share price is up almost 3% to $19.73. This follows solid gains by all of the big four banks on Tuesday. In addition, Westpac’s shares were given a boost from a note out of Morgan Stanley. Its analysts have reiterated their overweight rating this morning. This makes Westpac the only big four bank the broker rates as a buy.

The post Why GrainCorp, PointsBet, Weebit Nano, and Westpac shares are racing higher appeared first on The Motley Fool Australia.

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• 3 ASX All Ordinaries shares going great guns on Tuesday
• ASX 200 midday update: BHP and Rio Tinto rebound, Westpac rated as a buy
• Here’s why the Weebit Nano share price is rocketing 19% today
• Why is the Graincorp share price sprouting on Tuesday?
• Broker still sees over 100% upside for the PointsBet share price

Motley Fool contributor James Mickleboro has positions in Westpac Banking Corporation. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings Ltd and Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) is finally treating investors to a day in the green so far this Tuesday. At the time of writing, the ASX 200 is bouncing back from the recent falls we’ve seen and is currently up a healthy 1.34% and back over 6,500 points.

So let’s dive deeper into these positive market moves and check out the ASX 200 shares currently at the top of the market’s trading volume charts, according to investing.com.

The 3 most traded ASX 200 shares by volume this Tuesday

Whitehaven Coal Ltd (ASX: WHC)

ASX 200 coal miner Whitehaven is our first share to check out today. This resources company has had a hefty 22.95 million of its shares trade on the markets thus far. There have been no major announcements out of Whitehaven, save for a share buyback notice.

However, the Whitehaven share price has had a cracker today. It’s currently up 3.85% at $4.715, but rose as high as $4.96 earlier this morning. It’s probably this healthy bump in valuation that is behind the elevated trading volume today.

Core Lithium Ltd (ASX: CXO)

Core Lithium is our next ASX 200 company up today. This ASX lithium stock is enjoying its second day on the ASX 200 Index today after it made its promotion official yesterday.

Maybe this is why 23.23 million of the company’s shares have found their way around the ASX boards so far today. Or it could be the nasty 5.6% fall Core Lithium has endured today, despite the market’s good mood. It’s probably a combination that is resulting in the high trading volumes we are presently seeing.

Lake Resources N.L. (ASX: LKE)

Another ASX 200 newcomer is our final and most traded ASX 200 share of the day today. Lake Resources also joined the ASX’s flagship index yesterday. Unfortunately, it has been something of a baptism by fire.

This lithium hopeful has crashed by another painful 25.7% so far today and is now at $1.007 a share. This comes after the shock exit of its managing director Steve Promnitz. Lake Resources is now down by almost 34% over the past five trading days. No wonder 46.98 million shares have been bought and sold so far today.

The post Here are the 3 most heavily traded ASX 200 shares on Tuesday appeared first on The Motley Fool Australia.

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• Why is the Lake Resources share price crashing 25% today?
• Why Bowen Coking Coal, Lake Resources, Premier, and ResApp shares are tumbling lower
• How to start investing in stocks: This ASX 200 share is where I’d begin
• The ANZ share price has tumbled 24% from its 2022 high. Is it time to pounce?
• ASX 200 shares lift as RBA says recession not on the horizon

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It’s a great day to be invested in these All Ordinaries Index (ASX: XAO) shares as they surge higher to outperform the broader market.

Right now, the benchmark index is recording a 1.64% gain, but these stocks are leaving that in their dust.

They’re boasting gains of up to 12% right now. Let’s take a look at what’s spurring them along.

3 ASX All Ordinaries shares taking off on Tuesday

Weebit Nano Ltd (ASX: WBT)

All Ordinaries tech share Weebit Nano is leaping 12.24% this afternoon, trading at $2.20.

It comes as the company goes to demonstrate its ReRAM IP module publicly for the first time.

As my colleague Bernd Struben reported earlier today, the Weebit ReRAM is set to operate as an NVM memory block in a public presentation in France.

Still, the stock is 24% lower than it was at the start of the year.

PointsBet Holdings Ltd (ASX: PBH)

The PointsBet share price is also outperforming the ASX All Ordinaries on Tuesday. It’s trading at $2.81, 10.2% higher than its previous close.

There’s been no news from the bookmaker today. However, last week a US firm made a strategic investment into its stock.

Additionally, Goldman Sachs has slapped PointsBet’s shares with a price target of $5.78 and a buy rating, my colleague James Mickleboro reports.

The PointsBet share price has plunged 60% since the start of 2022.

Paladin Energy Ltd (ASX: PDN)

Finally, ASX All Ordinaries uranium share Paladin Energy is rocketing higher on Tuesday. It’s currently up 7.08% to trade at 60.5 cents.

There’s been no news from the stock to explain today’s gains. However, it dived 13% yesterday amid the apparent passing of the worst of the energy crisis.

Despite today’s uptick, however, the Paladin Energy share price is still 36% lower than it was at the start of this year.

The post 3 ASX All Ordinaries shares going great guns on Tuesday appeared first on The Motley Fool Australia.

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More reading

• ASX 200 midday update: BHP and Rio Tinto rebound, Westpac rated as a buy
• Here’s why the Weebit Nano share price is rocketing 19% today
• Broker still sees over 100% upside for the PointsBet share price
• Why did the Paladin Energy share price tumble 13% on Monday?
• Why Appen, Infomedia, PointsBet, and Vicinity shares are storming higher

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs and Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

In May 2021, Warren Buffett offered advice to investors at Berkshire Hathaway‘s annual meeting. For context, the stock market was soaring at the time — the S&P 500 had climbed 48% in the previous 12 months — fueled by unbridled enthusiasm brought on by stimulus checks, low interest rates, and the reopening of businesses in the wake of the pandemic. But Buffett’s words were sobering. 

He told his audience that many new investors were essentially gambling. Buffett also expressed his belief that index funds were a better option than individual stocks for the average person. Specifically, he recommended holding an index fund comprised of a diversified group of U.S. equities over a long time horizon.

Of course, the macroeconomic environment looks much different today. Rampant inflation and rising interest rates have caused the S&P 500 to crater, sending the benchmark index into bear market territory. But inflation hit a fresh 40-year high in May, so things may get worse before they get better. The S&P 500 is currently 23% off its high, but there have been six bear markets in the last 50 years, and the index dropped by over 45% on three of those occasions. 

Building on Buffett’s advice, here is one investment strategy that could help your portfolio weather the current downturn.

A diversified index of dividend stocks

Many dividend stocks outperform the market during downturns, especially those that regularly raise their payouts. The reason for that is simple. Only high-quality businesses generate enough cash to consistently pay shareholders a dividend that increases over time. If you reconcile that idea with Buffett’s advice, the Vanguard High Dividend Yield ETF (NYSEMKT: VYM) looks like an attractive investment idea right now. 

The Vanguard High Dividend Yield ETF comprises 443 U.S. stocks that span 10 market sectors, though 55% of the fund is allocated to consumer staples, energy, utilities, industrials, and healthcare, all of which tend to outperform in inflationary environments. Another 20% of the fund is invested in the financial sector, which tends to outperform in rising interest rate environments. To that end, the Vanguard High Dividend Yield ETF is currently just 14% off its high, easily outpacing the 23% decline in the broader S&P 500.

Also noteworthy, four of the index fund’s top 10 positions are stocks Buffett owns through Berkshire Hathaway. That includes Chevron and Bank of America, which account for 19% of Berkshire’s investment portfolio. Better yet, the Vanguard High Dividend Yield ETF bears an expense ratio of just 0.06%, meaning you would pay just $6 on a $10,000 portfolio, and its dividend yield currently sits at 2.72%, meaning a $10,000 portfolio would generate $272 in passive income each year.

As a caveat, while the Vanguard High Dividend Yield ETF has significantly outperformed the broader S&P 500 over the past year, especially when accounting for dividend payments, the S&P 500 typically wins in the long run. For instance, the S&P 500 has generated a total return of 65% over the past five years, while the Vanguard High Dividend Yield ETF has generated a total return of 47%.

However, you can’t put a price on peace of mind. If your current portfolio composition has you worried about the impact of runaway inflation, consider starting a position in this index fund. I think Warren Buffett would like the idea. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Worried about inflation? 1 investment strategy that Warren Buffett likes appeared first on The Motley Fool Australia.

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Trevor Jennewine has no position in any of the stocks mentioned. Bank of America is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Berkshire Hathaway (B shares). The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), short January 2023 $200 puts on Berkshire Hathaway (B shares), and short January 2023 $265 calls on Berkshire Hathaway (B shares). The Motley Fool Australia has recommended Berkshire Hathaway (B shares). The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Lake Resources N.L. (ASX: LKE) share price has come under significant pressure on Tuesday afternoon.

While the lithium developer’s shares were trading lower for much of the day, they suddenly collapsed after lunch.

At the time of writing, the Lake Resources share price is down 25% to 99 cents.

Why is the Lake Resources share price crashing?

The Lake Resources share price has come under pressure this week following the shock exit of its CEO and managing director, Steve Promnitz.

Promnitz had been leading the company since 2016 and left with immediate effect on Monday. The former CEO made no comments in the announcement, which is rather ominous.

He also left the company with 10.2 million Lake Resources shares in his portfolio.

Though, judging by a large block trade of 10.2 million shares at $1.19 per share for $12.138 million just after lunch, Promnitz could have already sold off his holding.

In light of this, investors appear to be panicking that something is wrong at the company and have been selling down the Lake Resources share price today.

One group of investors that will be pleased with this decline is short sellers. While Lake isn’t anywhere near to being the most shorted share on the Australian share market, recent data from ASIC shows that short interest has been rising strongly over the last few months.

What’s next?

Given the sharp and sudden decline by the Lake Resources share price, the company is likely to be hit with a price query from the ASX.

If that’s happens, it will have to give an explanation for the decline and, if that reveals that nothing is wrong behind the scenes, the selling pressure could ease.

The post Why is the Lake Resources share price crashing 25% today? appeared first on The Motley Fool Australia.

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More reading

• Why Bowen Coking Coal, Lake Resources, Premier, and ResApp shares are tumbling lower
• Why is the Lake Resources share price sinking 14% today?
• Top broker names 4 ASX lithium stocks to buy now
• Up 566% in a year, Lake Resources share price surges 10% today
• Lake Resources share price defies rout to leap 14%

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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